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Rule of 100
This is a very popular asset allocation thumb rule, which aligns asset allocation to different stages of life. In the Rule of 100, you simply subtract your age from 100, and the result suggests the maximum percentage amount of your portfolio that should be exposed to equities. So for a 25 year old investor, this rule suggests that 75% of his / her portfolio should be invested in equities, and for a 40 year old investor, this rule suggests that 60% of the portfolio should be invested in equities.
Every time, you rebalance your portfolio, you should ensure that the asset allocation is aligned with the stage of life target asset allocation (as shown in the table). Please note that the Rule of 100 is simply asset allocation guidance – depending on your risk appetites, you can opt for different asset allocation models, but you must take your risk capacity / stage of life in consideration when deciding your asset allocation for life-cycle investment strategies.
Source:Advisorkhoj